Brent looks directionless after three weeks of losses, with the $90 handle in focus
Following two days of modest gains, oil prices fell on Tuesday after failed attempt to challenge $93 a barrel. Brent crude regained the bullish bias on Wednesday, holding above the $92 figure after bouncing off $90 earlier in the day. Oil futures fell 1.2% in the previous session to gain more than 1.5% since the start of the day on Wednesday.
Oil futures refrain from a more aggressive retreat, albeit also struggle to stage a sustained and robust ascent, holding slightly above January lows seen around $87 earlier this month. As such, oil prices look directionless after three weeks of losses, with the $90 handle in focus.
In the immediate term, Brent could be pressured by expectations of another aggressive US interest rate hike. The Federal Reserve is expected to hike by another 0.75% later today, thus pushing the dollar higher across the board. A so-called aggressive hike would pressure riskier assets, including oil.
Elsewhere, the American Petroleum Institute said US crude and fuel stocks rose by about 1 million barrels for the week ended September 16. Gasoline inventories rose by about 3.2 million barrels, while distillate stocks rose by about 1.5 million barrels. Later in the day, the official data from the EIA could hurt the market if the report reveals a solid rise in inventories.
Technically, the path of least resistance remains to the downside at this stage, especially as oil prices struggle to get back above the $95 figure. A failure to hold above the $90 figure would bring the mentioned January lows back into the market focus. On the upside, a decisive recovery above $95 would imply that the futures could retarget the $100 psychological level for the first time since late-August.